The Impact of Cash Management on Profitability and Sustainability of Small and Medium Manufacturing Business in Kirtipur Municipality

Abstract

Small businesses are vital for employment and job creation in Nepal. The implementation of sound cash management practices is essential to ensure to profitability and sustainability of any successful business. The commonly used expression, “Cash is king” cannot be contested as its validity was more prevalent in this research study. The aim of the study was to identify the current cash management practices of small and medium manufacturing businesses in the Kirtipur Municipality and identify the impact of such practices on their profitability and sustainability. The objectives of the study are to find the current position of cash management practices of small and medium manufacturing businesses. Some specific objectives of the study to find the effect of cash management on profitability of small and medium manufacturing businesses and the effect of cash management and sustainability of small and medium manufacturing businesses in Kirtipur Municipality. There was an insignificant relationship between cash management and sustainability. This descriptive study, using a quantitative research paradigm and a sampling method targeted a sample of more than 50% of registered businesses in the chosen area. The sample structure consisted of small and medium manufacturing businesses in the Kirtipur Municipality. The findings of this study could be useful to potential, emerging and established owners of all types of businesses since effective and efficient cash management is an integral component of any successful business. There should be more emphasis placed on the impact of how proper cash management practices can affect profitability and sustainability of small and medium manufacturing businesses.